[jeff]

Welcome to the Q1 2016 CPA Exam Study Group for REG.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

[nib]

@ emitremus3 , fruitsyrup

thanks. . that explanation js nice .
i m still getting confuse in corporation and partnership . any tip .

[nib]

I am confuse about following , I thought answer to be 150,000 , but correct answer is 50, 000 . ,Is Netting of mortgages allowed ?

In the current year Tantrum exchanged farmland for an office building. The farmland had a basis of $240,000, a fair market value (FMV) of $390,000, and was encumbered by a $110,000 mortgage. The office building had an FMV of $340,000 and was encumbered by a $60,000 mortgage. Each party assumed the other’s mortgage. What is the amount of Tantrum’s recognized gain?

ans= 50,000

Tantrum should recognize a gain of $50,000. Since each party assumed the other’s mortgage, Tantrum’s mortgage liability was reduced from $110,000 to $60,000, and thus he benefited or gained by $50,000.

[nib]

hello,

in this calculation , as per my calculation , for 2016 year ,base to calculate 2016 depreciation = 161000-52200 = 108800 * 32% depreciation= 34,816
but for my surprise , 2016 base to calculate depreciation =161000-25000 = 136000 .*32 % = 43520 .

On February 1, 2015, Pam Baker purchased a $161,000 machine (5-year property) for use in her business. Pam expensed $25,000 under Section 179 in addition to the regular depreciation of 20% in 2015 and 32% in 2016. Pam's total deductions for 2015 and 2016 for the machine are:

ans= $52,200 (2015) and $43,520 (2016).

explanation =

Pam's 2015 deduction is:

Section 179 $25,000
20% x ($161,000 – $25,000) 27,200
——-
$52,200

Pam's 2016 deduction is:

32% x ($161,000 – $25,000) = $43,520

[nib]

pls help me to understand following question .

, as per my view , MACR is first – In most cases we use macr 5 yrs or 7 yrs , then 179 because sec 179 available when equipment used for more than 50 % in business , then bonus 50 % . because in most question rarely we have seen 50 % bonus .
But answer shows Section 179 expensing , 50 % bonus , MACR .

MCQ : Business equipment purchased in tax year 2014 had available three methods of cost recovery:

MACRS depreciation
50% bonus depreciation for certain assets
Section 179 expensing

In what order should these methods of cost recovery be applied to calculate the deduction?

A. 1, 2, 3
B. 3, 2, 1
C. 2, 3, 1
D. 2, 1, 3

corect answer is B

explanation = The 50% bonus depreciation is applied to the adjusted basis (0.50 × Original cost − Section 179 expense), then that amount is deducted from the basis. The MACRS cost recovery depreciation is 14.29% for the first year for 7-year property. This rate is applied against the remaining basis after deducting the Section 179 expense and the 50% bonus depreciation.

[Anonymous]

hmm that's a bit surprising. Actually, I just learned yesterday that for MACRS depreciation, you always use the original basis regardless of year so I guess that applies for the 179 deduction as well.

[nib]

as per my understanding , As land distributed before valuation date ( before 6 months), 7400000 should be chosen as value for estate which is fmv on date of distribution .
Answer shows 72 lakhs = fmv on alternative valuation date .
please help me to understand reason .

Natalie inherited land from her Uncle Josh, who died January 3, 2015. The basis to Josh was $1,000,000 and the value on January 3, 2015, was $7,200,000. On July 3, 2015, the value was $7,600,000. When the land was distributed to Natalie on June 3, 2015, the value was $7,400,000. This land was Josh's entire estate. Natalie's basis for the estate is:

ans= 72,00000

explanation : In order to select the alternate valuation date of July 3, the valuation must be lower, resulting in reduced estate tax liability. Since the market value has risen, the value at time of death ($7,200,000) must be selected.

[nib]

@ CantStopWontStop

I guess you are right .for MACR depreciation, all years consider basis to calculate depreciation = 161000-25000 = 136000

thanks

[Rolando24]

Does anyone know how to code for the search tab, everytime i do it its wrong even though i have the answer in front of me

FAR - 76
Aud - 84
Reg - Aug 31
BEC - Nov

[nib]

I answered it as C = One-half of the proceeds would be allocated to principal and one-half to income.

But corect answer A =The entire proceeds would be allocated to principal and retained.

WHY ? I thought sale proceed upto original principal =100,000 will go to principal . ans rest 100,000 gain will go to income beneficiary .

Frost’s will created a testamentary trust naming Hill as life income beneficiary, with the principal to Brown when Hill dies. The trust was silent on allocation of principal and income. The trust’s sole asset was a commercial office building originally valued at $100,000 and having a current market value of $200,000. If the building was sold, which of the following statements would be correct concerning the allocation of the proceeds?

correct =A. The entire proceeds would be allocated to principal and retained.

B. The entire proceeds would be allocated to income and distributed to Hill.
Incorrect C. One-half of the proceeds would be allocated to principal and one-half to income.
D. One-half of the proceeds would be allocated to principal and one-half distributed to Brown.

[Anonymous]

Rolando24, what review materials are you using?

[sva_123]

@Amor D – I read in a previous thread that you were/are a Keller student. I'm looking into taking one of the Keller (Becker) prep courses for credit to complete my 150 requirement and had a couple questions about it (exactly how the course is set up (for self study) and time commitment, etc). Any thoughts? Any input would be appreciated.

AUD: Pass (July 2015)
BEC: Pass (Nov 2015)
REG: Pass (Feb 2016)
FAR: Pass (June 2016)
Ethics: 100%

Becker self study and Ninja 10 pt combo

[Anonymous]

@Sva, yes. I think Devry/Keller owns Becker. You might want to give them a call for details. I could see you already passed AUD and BEC. I am not sure if it's still worth to sign up for Becker's complete CPA programs since you're already half way done. If I am not mistaken, AUD and FAR are 3 credit hours while BEC and REG are 2 only. Keller's online program is very flexible and well laid out.

I just wish I finished first my master's degree instead of setting it aside for CPA preparation in 2014. I already passed FAR and AUD and yet struggling really hard with REG and BEC. Perhaps completing the master's program would help me understand US business, taxation, and regulations better.

[sva_123]

Thanks for the quick reply AmorD. My plan was to only take the FAR for 3 credits. My concern was getting behind on weekly homeworks since I work FT. I thought it was similar to the self study Becker which I've been doing so far and if so that would be good. If it was anything more like blogs or else I was going to look at another course.

I've been out of school for a while now so these exams have been like starting over from scratch for me. My recommendation for BEC is lots of MCQs and memorizing formulas.

AUD: Pass (July 2015)
BEC: Pass (Nov 2015)
REG: Pass (Feb 2016)
FAR: Pass (June 2016)
Ethics: 100%

Becker self study and Ninja 10 pt combo

[Anonymous]

How many MCQs have you done hit that 14-point increase to pass BEC?

The Keller CPA program is the same with Becker. Play all the lectures and answer MCqs (90% correct) from day 1 to the last. Only one forum participation is required per week and 10-point quiz (at least 60% correct) at the end of the week.

[sva_123]

I did around 600 total on the retake with Ninja MCQ. What I've realized with both of my exams is that I take way too long doing Becker and by the time I go in the for the first take I don't finish doing a full review. For the retake I did a full 3 weeks of MCQs and had everything fresh in mind versus trying to remember information from 8 weeks back. Made a big difference especially in audit.

Not bad on the Keller class. I'll call them as well for more info. Thank you!

AUD: Pass (July 2015)
BEC: Pass (Nov 2015)
REG: Pass (Feb 2016)
FAR: Pass (June 2016)
Ethics: 100%

Becker self study and Ninja 10 pt combo

[Author]

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